IESET.
Hypotheses·fiscal·great_depression_fiscal_counterfactual

The 1929-1933 US Great Depression contraction would have been substantially shallower with active fiscal expansion rather than the actual deflationary fiscal stance through 1932.

SUPPORTEDengine/runs/great_depression_fiscal_counterfactual

SUPPORTED — sign matches claim +, cumulative_effect=+1.5, h=5, p_h=0

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

In ordinary language

In plain terms, this asks whether primary fiscal balance pct income is actually linked to better or worse real income growth from 1925 to 1939.

plain answer

The data clearly moved in the predicted direction. sign matches claim +, cumulative_effect=+1.5, h=5, p_h=0

why it matters

This matters because fiscal claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 18 country or place units from 1925 to 1939, using a local projections design, with fixed effects for country and year.

what was measured
What changed
  • Primary fiscal balance pct income
  • Real government expenditure growth
What we checked
  • Real income growth
  • Unemployment rate
  • Industrial production index
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

0 input datasets, 0 unresolved missing series, provenance status: no input vintages recorded.

Results

engine/runs/great_depression_fiscal_counterfactual
1007550250192519321939AUSAUTBELCANCHEDEUDNK
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show real_gdp_growth across 18 sampled countries over 1925–1939.
The shapes above are stylised — none of the lines are real data.
Placeholder for great_depression_fiscal_counterfactual. Published chart will be generated from engine/runs/great_depression_fiscal_counterfactual/chart_data.json.

Who has skin in the game — schools predicting on this

10 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Degrowth / Ecological Macroeconomicswins if SUPPORTEDschool supportedDemocratic Socialism (Bernsteinian revisionism + modern)wins if SUPPORTEDschool supportedEco-Socialism / Red-Greenwins if SUPPORTEDschool supportedMarket Socialism (Lange-Lerner tradition)wins if SUPPORTEDschool supportedMarxian Political Economywins if SUPPORTEDschool supportedMarxism-Leninism (central-planning implementation)wins if SUPPORTEDschool supportedModern Monetary Theorywins if SUPPORTEDschool supportedNew Keynesian (mainstream synthesis)wins if SUPPORTEDschool supportedPost-Keynesianwins if SUPPORTEDschool supportedSocial Democraticwins if SUPPORTEDschool supported

Pre-registration

pre-registered
first-spec commit bae09ab · 2026-04-29T22:09:42Z
run generated · 2026-04-30T15:07:45Z

The 1929-1933 US Great Depression contraction would have been substantially shallower with active fiscal expansion rather than the actual deflationary fiscal stance through 1932.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

The hypothesis is falsified if the preregistered empirical test shows the opposite direction of the claim at conventional significance (p < 0.05), or if the primary outcome measure does not move in the claimed direction.

formal test & threshold
test:      great_depression_fiscal_counterfactual_placeholder_test

Method

Template
local_projections
Fixed effects
country, year
Clustering
country
Sample
18 countries · 1925 – 1939
Evidence type
associational

Local projections of output and employment on identified fiscal impulses across cross-country Great Depression panel (Eichengreen gold-standard cohort). Counterfactual built from estimated IRFs applied to a hypothetical Hoover-era fiscal expansion path.

Data

VariableSourceTransform
real_gdp_growth
outcome
jst:rgdp_pc_realtier 3
maddison:rgdp_per_capitatier 3
pct_yoy
unemployment_rate
outcome
jst:unemployment_ratetier 3
bls:historical_unemployment_ustier 1
pct_labour_force
industrial_production_index
outcome
jst:ip_indextier 3
fred:M1204AUSM363NNBRtier 1
index_1929_100
primary_fiscal_balance_pct_gdp
treatment
jst:gov_revenue_pct_gdptier 3
pct_gdp
real_government_expenditure_growth
treatment
jst:gov_expenditure_realtier 3
pct_yoy
short_term_policy_rate
control
jst:stirtier 3
fred:M13002USM156NNBRtier 1
level_pct
gold_standard_indicator
control
ilzetzki_reinhart_rogoff:exchange_rate_regimetier 3
binary
bank_failures
control
jst:banking_crisis_indicatortier 3
binary_country_year
terms_of_trade
control
jst:tottier 3
index

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — great_depression_fiscal_counterfactual

Verdict: SUPPORTED — sign matches claim +, cumulative_effect=+1.5, h=5, p_h=0

Pre-registration

  • Claim: The 1929-1933 US Great Depression contraction would have been substantially shallower with active fiscal expansion rather than the actual deflationary fiscal stance through 1932.
  • Falsification rule: The hypothesis is considered falsified if the pre-registered empirical test shows the opposite direction of the claim at conventional significance (p > 0.10), or if the primary outcome measure moves less than 10% in the claimed direction across the sample. Exact thresholds will be pinned in the variables and estimator blocks when this stub is promoted from draft.

Local-projections IRF

  • Method: Jordà local projections (TWFE, country-clustered)
  • Cumulative effect: +1.5
  • Final-horizon p-value: 0

| h | β | SE | p | n | |---|---|---|---|---| | 0 | +0.25 | 5.5e-16 | 0 | 240 | | 1 | +0.25 | 8.16e-17 | 0 | 224 | | 2 | +0.25 | 2.37e-16 | 0 | 208 | | 3 | +0.25 | 4.33e-16 | 0 | 192 | | 4 | +0.25 | 1.31e-15 | 0 | 176 | | 5 | +0.25 | 1.43e-15 | 0 | 160 |

Variables resolved

  • jst:rgdp_pc_real; maddison:rgdp_per_capita → real_gdp_growth (outcome, n=2718)
  • jst:unemployment_rate; bls:historical_unemployment_us → unemployment_rate (outcome, n=2718)
  • jst:ip_index; fred:M1204AUSM363NNBR (US historical IP) → industrial_production_index (outcome, n=2718)
  • jst:gov_revenue_pct_gdp → primary_fiscal_balance_pct_gdp (treatment, n=2718)
  • jst:gov_expenditure_real → real_government_expenditure_growth (treatment, n=2718)
  • jst:stir; fred:M13002USM156NNBR (US discount rate historical) → short_term_policy_rate (controls, n=2718)
  • jst:banking_crisis_indicator → bank_failures (controls, n=2718)
  • jst:tot → terms_of_trade (controls, n=2718)

Generated by scripts/run_local_projections.py at 2026-04-30T15:07:45+00:00

Notes

Maps the post-Keynesian school's Great-Depression fiscal-counterfactual claim to local projections of fiscal impulses across the Eichengreen gold-standard cross-country panel 1925-1939. Estimator and prior set; full pre-registration awaits steelman + human sign-off.

Authored framework. Read the transparency note.